Spain's Liberbank jumps after rare Madrid listing

MADRID--Liberbank SA, a small Spanish lender created by the merger of several cash-strapped savings banks, saw its shares jump Thursday after they were listed in Madrid, an unusual move that seeks to compensate debt holders who were forced to accept shares in exchange for bonds.

Liberbank listed its shares at 0.40 euro cents each at 1000 GMT, but they rose from early trade and just minutes later were trading at EUR0.58, up 46% from the listing price.

This comes in contrast with widespread expectations of an early price drop, as many of Liberbank shareholders are former holders of junior debt converted into stock at EUR1.11 a share--which implies the listing had a 64% discount on the conversion price.

A spokesman for Liberbank previously acknowledged the company's share price could fall after the listing but said the bank is working to make the company an attractive investment for shareholders.

The bank has promised to pay shareholders who keep their stock for at least two years an annual interest of 6% on the EUR1.11 book value of the shares during that time. It has also pledged to compensate shareholders up to EUR0.61 a share in either shares or cash if the price in two years is below EUR1.11.

Write to David Roman and Pablo Dominguez at david.roman@wsj.com Twitter: @dromanber

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